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Bank of America, N.A. v. SFR Investments Pool 1, LLC

United States District Court, D. Nevada

November 20, 2019

BANK OF AMERICA, N.A., Plaintiff
v.
SFR INVESTMENTS POOL 1, LLC, et al., Defendants

          ORDER (1) GRANTING IN PART SFR'S MOTION FOR SUMMARY JUDGMENT AND (2) GRANTING BANK OF AMERICA'S MOTION FOR SUMMARY JUDGMENT [ECF NOS. 70, 71]

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE.

         Plaintiff Bank of America, N.A. sues to determine whether its deed of trust encumbering property located at 10828 Mystic Shore Avenue in Las Vegas, Nevada was extinguished by a nonjudicial foreclosure sale conducted by a homeowners association (HOA). Defendant SFR Investments Pool 1, LLC (SFR) purchased the property at the foreclosure sale. Bank of America seeks a declaration that its deed of trust still encumbers the property. SFR counterclaims for declaratory relief that it purchased the property free and clear of the deed of trust.[1] SFR also filed a declaratory relief cross-claim against the former homeowner, Ryan Torrisi.

         Bank of America and SFR move for summary judgment on a variety of grounds. The parties are familiar with the facts so I do not repeat them here except where necessary. I grant Bank of America's motion and deny SFR's motion as to Bank of America because no genuine dispute remains that Bank of America tendered the superpriority amount, thereby extinguishing the superpriority lien and rendering the sale void as to the deed of trust. I grant SFR's motion as to its cross-claim against Torrisi because the HOA foreclosure sale extinguished Torrisi's interest in the property.

         I. ANALYSIS

         Summary judgment is appropriate if the movant shows “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000); Sonner v. Schwabe N. Am., Inc., 911 F.3d 989, 992 (9th Cir. 2018) (“To defeat summary judgment, the nonmoving party must produce evidence of a genuine dispute of material fact that could satisfy its burden at trial.”). I view the evidence and reasonable inferences in the light most favorable to the non-moving party. James River Ins. Co. v. Hebert Schenk, P.C., 523 F.3d 915, 920 (9th Cir. 2008).

         A. Torrisi

         SFR moved for judgment as to Bank of America and Torrisi. ECF No. 71 at 1. Torrisi previously defaulted in this case. ECF No. 47. He did not respond to SFR's motion. He therefore has not pointed to evidence that would (1) counter SFR's evidence and the presumption that the HOA sale was properly conducted, (2) overcome the presumption in favor of SFR as titleholder of record, or (3) otherwise support setting aside the sale as to him. See Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow Canyon, 405 P.3d 641, 646 (Nev. 2017). Consequently, I grant SFR's motion as to Torrisi.

         B. Bank of America

         Under Nevada law, a “first deed of trust holder's unconditional tender of the superpriority amount due results in the buyer at foreclosure taking the property subject to the deed of trust.” Bank of Am., N.A. v. SFR Investments Pool 1, LLC, 427 P.3d 113, 116 (Nev. 2018) (en banc). To be valid, tender must be for “payment in full” and must either be “unconditional, or with conditions on which the tendering party has a right to insist.” Id. at 118.

         Bank of America has met its burden of establishing that it tendered the superpriority amount in full. The monthly HOA assessment was $50 per month. ECF Nos. 70-22; 70-23. Prior to the HOA foreclosure sale, Bank of America tendered $450 to the HOA's foreclosure agent, Nevada Association Services, Inc. (NAS), to cover the superpriority amount of nine months of assessments. ECF No. 70-7 at 15-17. NAS refused to accept the check, consistent with NAS's policy at the time to not accept tenders of nine months of assessments. Id. at 19; ECF No. 70-24 at 5-6. SFR has presented no contrary evidence in response. Consequently, no genuine dispute remains that the superpriority lien was extinguished and the property remains subject to the deed of trust. Bank of Am., N.A., 427 P.3d at 121.

         SFR raises several arguments as to why tender did not extinguish the superpriority lien. None raises a genuine dispute precluding summary judgment.

         1. Evidentiary Challenges

         SFR objects to a ledger with the Bates stamp BANA000047, which is the ledger for another property located in the same HOA that Bank of America used to calculate its tender for this property. SFR contends this ledger has not been authenticated. Next, SFR contends Bank of America cannot show tender was delivered to NAS because it cannot rely on the affidavit of Adam Kendis, a paralegal with the law firm Miles Bauer Bergstrom & Winters, LLP (Miles Bauer). SFR argues that Kendis lacks knowledge to authenticate the runner's slip attached to his affidavit and there is inadmissible hearsay within that document. It also argues that Bank of America cannot rely on a screenshot from Miles Bauer's computer database because it contains hearsay. SFR also contends ...


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